1Q12 EARNINGS RESULTS - COL Financial · during 1Q11. Interest income rose by 7.9% to Php47.2 Mil as higher income from cash placements more than offset the impact of lower margin

1Q12 EARNINGS RESULTS May 2012

WWW.COLFINANCIAL.COM


Investor Presentation Highlights

1 Company Overview

2 1Q12 Financial & Operating Highlights

3 Updates on Growth Strategy


Company Overview

Established and licensed by the SEC in 1999

The leading and fastest growing online stockbroker

Highly successful in building an organization that taps the underserved retail investor base in the stock market

Founder ( Edward K. Lee ) retains 19.5%

stake and actively manages the Company


Ownership Structure

* As of end – March 2012

Outstanding Shares 466.8Mil

Free Float 211.1Mil

Market Cap * Php 10.6Bil

19.5%

13.9%

21.4%

45.2%

Edward K. Lee

Alexander C. Yu

Other Directors & Officers

Public


Business Objective

To be the preferred source of financial services, a trusted provider of guidance and investment ideas and a strong organization committed to

delivering great value to its customers.

Our goal is to be the champion of the Filipino investor.


Commissions from the Philippines Account for Bulk of Revenues

Philippines 87.7%

Hong Kong 12.3%

Revenues according to Geography

Commissions 76.4%

Interest 23.1%

Other income 0.5%

Sources of Revenues

. . . . . . . . . AUGUST 1999 Became licensed by the SEC to conduct business as a broker and dealer of securities in the Philippines.

MARCH 2001 The COL PH online trading platform became operational. APRIL 2002 CitisecOnline HK Ltd. (COLHK) became a trading participant of the HK Exchange. MAY 2002 The COLHK platform was launched.

NOVEMBER 2005 The COL PH Trading Platform was officially launched to the public. JULY 2006 COL listing in the PSE via initial public offering (IPO). NOVEMBER 2006 The COL Investor Education Series comprised of free basic and advanced technical seminars was launched. Margin Financing was launched. DECEMBER 2006 PSE approved COL’s application as a trading participant of the PSE.

JANUARY 2008 Received the PSE Outstanding Domestic IPO Award for 2006 and special recognition for Active Investor Education. COL was ranked by the PSE as the #1 Online Stockbroker in the Philippines for most number of trades transacted. AUGUST 2008 Launch of the COL Easy Investment Program. FEBRUARY 2009 COL operates its seat at the PSE.

APRIL 2010 Launch of the full-

service independent advisory team called

the Private Clients Group (PCG).

DECEMBER 2010 COL PRO, the first

real-time, customizable, all-in-

one trading application, was provided to high-

value customers for more efficient

transacting.

JULY 2011 Opening of the COL Business

and Data Center in Ayala Triangle Tower 1, Makati.

Corporate Milestones

FEBRUARY 2012 Launched the Relationship Manager services for high value customers. MARCH 2012 SEC approves the change in corporate name to COL Financial Group, Inc. APRIL 2012 Launch of the new COL website with streaming data.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012



1 Company Overview




1Q12 Net Income Higher by 57.8%

Consolidated net income up 57.8% to Php129.5 Mil Revenues increase 34.6% largely driven by strength

of Philippine operations.

Growth in costs outpaced revenues largely due to the increasing share of our lower margin HNW & Institutional business. This is evidenced in the 88% increase in commission expenses.

Personnel costs rose 19.2% while professional fees rose 23.2% largely due to increase in capacity and realignment of pay (larger share of fixed pay relative to bonuses).

Significant increase in depreciation due to recently

completed capacity expansion program.

Provision for taxes drop by Php19.1 Mil due to the exercise of 8.3 Mil worth of stock options, leading to an increase in unbooked tax deductible expenses.

COL FINANCIAL GROUP, INC Consolidated Income Statement (In PhpMil)

1Q11

1Q12 Change

Amount % INCOME Commissions 99.3 156.0 56.7 57.0% Interest 43.8 47.2 3.5 7.9% Other income 8.6 1.0 (7.6) -88.3% Total 151.7 204.2 52.5 34.6% EXPENSES Commission expenses 11.9 22.4 10.5 88.0% Personnel costs 13.5 16.1 2.6 19.2% Professional fees 5.5 6.8 1.3 23.2% Stock exchange dues and fees 3.2 5.2 2.0 64.6% Communication 3.6 5.5 1.9 53.9% Rentals and utilities 2.8 3.8 1.0 33.6% Depreciation 2.5 4.2 1.8 72.2% Stock option expense 0.4 1.3 0.9 197.1% Others 6.6 8.8 2.3 34.7% 50.0 74.1 24.2 48.4% PRE-TAX INCOME (LOSS) 101.7 130.1 28.3 27.9% TAXES 19.7 0.6 (19.1) -97.0% NET INCOME (LOSS) 82.0 129.5 47.4 57.8% EPS - Basic 0.19 0.28 0.09 47.4% EPS - Fully diluted 0.17 0.27 0.10 58.8%


Philippines Drive 34.6% Increase in Revenues

Strong growth of Philippine revenues more than offset weakness of HK revenues. Philippine revenues rose 45.3% to Php179.0 Mil while HK revenues dropped 11.6% to Php25.2 Mil. As of 1Q12, the Philippine accounted for 87.7% of revenues, up from 81.2% during 1Q11.

Commission from local operations grew 85.6% to Php130.8 Mil driven by strong performance of the local market and the expansion of COL's client base.

Commission from the HNW & Institutional group grew at a faster pace of 127.8% to Php45.1 Mil. The said group accounted for 34.5% of Philippine commission revenues during 1Q12, up from 28.1% during 1Q11.

Interest income rose by 7.9% to Php47.2 Mil as higher income from cash placements more than offset the impact of lower margin utilization.

Commission from HK fell 12.8% to Php25.2 Mil due to the weakness of the HK market, prompting clients to shift funds to the Philippines.

COL FINANCIAL GROUP, INC Revenue Breakdown (In PhpMil)

Philippines

1Q11

1Q12

Change Amount %

Commission 70.5 130.8 60.3 85.6% Regular accounts 50.7 85.7 35.0 69.0% HNW & Inst’l accounts 19.8 45.1 25.3 127.8%

Interest 43.8 47.2 3.5 7.9% Others 9.0 1.0 -8.0 -88.8% Philippine Revenues 123.2 179.0 55.8 45.3% Hong Kong Commission 28.9 25.2 -3.7 -12.8% Interest 0.0 0.0 0.0 -34.7%

Others -0.4 0.0 0.4 -101.1% Hong Kong Revenues 28.5 25.2 -3.3 -11.6% Consolidated Revenues 151.7 204.2 52.5 34.6%


ROAE Improves Despite Decline in Margins

Operating profits grew by 27.9% to Php130.1 Mil as the 37.4% increase in operating profits from the Philippines more than offset the 16.4% drop in operating profits from HK. During 1Q12, the Philippines accounted for 88.4% of operating profits, up from 82.3% during 1Q11.

Operating margin fell from 67.1% to 63.7% as margins from both the Philippines and HK dropped.

Operating margin from Philippine operations fell due to the increasing share of our lower margin HNW & Institutional business.

Operating margin from HK operations fell due to weakness in revenues.

Despite the drop in margin, ROAE improved to 42.8% from 30.7% as leverage increased and due to the drop in provision for income taxes.

COL FINANCIAL GROUP, INC Selected Financial Indicators

1Q11

1Q12

Change Amount %

Operating Profits Philippines 83.7 115.0 31.3 37.4% Hong Kong 18.0 15.1 -2.9 -16.4% Total 101.7 130.1 28.3 27.9% Operating Margins Philippines 68.0% 64.2% Hong Kong 63.2% 59.8% Consolidated 67.1% 63.7% EBITDA Margin 69.0% 66.4% Net Margin 54.1% 63.4% Asset Turnover* 24.0% 20.0% Asset/Equity 2.5 3.6 ROAE* 30.7% 42.8% *Annualized


Strong and Highly Liquid Balance Sheet

Strong, highly liquid balance sheet.

Significant increase in cash position due to steep rise in clients' cash position from Php1.9 Bil as of end 2011 to Php2.4 Bil as of end March 2012.

No interest bearing debt outstanding.

Stockholders' equity fell by 13.1% to Php1.1 Bil due to the declaration of Php0.60/sh worth of cash dividends, partly offset by the booking of 1Q12 net income of Php129.5 Mil.

COL FINANCIAL GROUP, INC Consolidated Balance Sheet (In PhpMil)

12/31/11 3/31/12

Change Amount %

ASSETS Current Assets Cash and cash equivalents 2,188.9 2,730.0 541.0 24.7% Trade Receivables 1,160.7 1,208.6 47.9 4.1% Other Receivables 8.1 11.0 2.9 35.3% Financial Assets at FVPL 1.3 0.5 -0.8 -63.1% Prepayments 2.2 6.4 4.2 191.7% 3,361.3 3,956.5 595.2 17.7% Non-Current Assets Property and Equipment-net 41.7 45.0 3.3 7.9% Stock Exchange Trading Right 23.0 22.7 -0.4 -1.6% Deferred Tax Assets 75.2 55.9 -19.3 -25.7% Other Non-Current Assets 8.6 11.3 2.6 30.5% 148.6 134.8 -13.7 -9.2% TOTAL ASSETS 3,509.8 4,091.4 581.5 16.6% LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Trade payables 2,133.5 2,634.3 500.8 23.5% Dividends payable 0.0 280.1 280.1 - Other current liabilities 75.2 45.9 -29.3 -39.0% 2,208.7 2,960.3 751.6 34.0% Non-Current Liabilities Retirement obligation 6.2 6.2 0.0 0.0% Total Liabilities 2,214.9 2,966.5 751.6 33.9% Stockholders' Equity 1,295.0 1,124.9 -170.1 -13.1%


Sustained Customer Growth

Client Base

1,273

5,000 6,309 8,716

15,345

28,067

18,818

32,619

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2006 2007 2008 2009 2010 2011 1Q11 1Q12

00 73.3%

942

3,648 2,128

5,122

11,962

17,344

14,297

21,934

-

5,000

10,000

15,000

20,000

25,000

2006 2007 2008 2009 2010 2011 1Q11 1Q12


Sustained Customer Growth

Client Equity (PhpMil)

00 53.4%


Comparative Performance (COL vs. PSE)

1Q11 1Q12 Change

Amount %

PSE Ave. Daily T/O (PhpMil) 5,089.6 7,845.6 2,756.0 54.1%

Col Ave. Daily T/O (PhpMil) 408.0 763.9 355.9 87.2%

Col Market Share 4.0% 4.3%

PSE Ranking 8 7

No. of Transactions – PSE (‘000) 1,882.0 3,407.0 1,525.0 81.0%

No. of Transactions – COL (‘000) 355.0 797.0 442.0 124.5%

COL Market Share 18.9% 23.4%

PSE Ranking 1 1

27 137 114

202

573

1,102 1,218

972

-

200

400

600

800

1,000

1,200

1,400

2006 2007 2008 2009 2010 2011 1Q11 1Q12


Margins Loans Drop

Average Daily Margin Loans

20.0%



1 Company Overview




Updates on Growth Strategy

Capacity expansion completed

Total capex of Php35 Mil spent in 2011 and 1Q12 to upgrade both hardware and network infrastructure

Front end capacity now up to 100,000 clients Technological improvements were also implemented to increase

efficiency in servicing clients (ex. Client deposits and withdrawals, specialized services for certain client segments)

Recently changed company name to COL Financial Group Inc.

To give us more leeway in providing other services to clients



Increase frequency and menu of seminars for clients

Basic seminar currently only conducted 3X a week, and waitlist of 1 month

Menu currently limited to basic stock market, EIP, technical analysis, and fundamental analysis seminars.

Increase awareness regarding the use of margin

Only 200 to 300 out of 800 clients with margin facilities utilize margin Only 20% of total margin loan granted are utilized by clients



Focus on improving customer loyalty

Continuous improvement of website features Roll out of new products and services

Implementation of focused marketing campaigns

To improve our ability to attract new clients in a more efficient manner

THANK YOU.


Documents

1Q12 EARNINGS RESULTS - COL Financial · during 1Q11. Interest income rose by 7.9% to Php47.2 Mil as higher income from cash placements more than offset the impact of lower margin